Posts Tagged ‘foreign direct investment’

Vinai Thummalapally is the Executive Director of the SelectUSA Program.

Deputy Under Secretary of Commerce for International Trade Ken Hyatt (center) joined Louisiana Governor Bobby Jindal (left) and Sasol CEO David Constable to celebrate the announcement of Sasol’s new facility.

Earlier this week I had the pleasure of visiting Lake Charles, Louisiana to congratulate South African energy giant Sasol Limited on the firm’s final investment decision to build an $8.1 billion ethane cracker and derivatives complex.Sasol has also confirmed an additional $800 million investment in infrastructure, utility improvements, and land acquisition.

When making the announcement, Sasol President and CEO David Constable anticipated that the new complex will triple the company’s chemical production capacity in the United States and create 500 permanent jobs in the state of Louisiana, in addition to thousands of indirect jobs. Construction of the complex will employ an additional 5,000 people between now and 2018.

This decision represents an historic investment for the company, for the State of Louisiana, and possibly for the United States. This project was initially announced in 2012, along with a gas-to-liquids (GTL) facility. If the GTL project also moves forward, the entire complex would be one of the largest foreign direct investments (FDI) in manufacturing the United States.

Our team at the U.S. Department of Commerce has worked with Sasol and LED since 2012 to encourage Sasol to create these jobs in the United States. SelectUSA, the U.S. government-wide investment-promotion program housed in the International Trade Administration, coordinated within Commerce and with other federal agencies to identify resources and address questions or issues related to federal regulations. President Obama established SelectUSA in 2011 to serve precisely this purpose: to act as a single point of contact for investors, as well as for state and local governments, to facilitate job-creating investment.

Sasol, the State of Louisiana, and several local partners cooperated to develop tools to support both Sasol’s investment success as well as the long-term economic vitality of the region. In December 2013, the Southwest Louisiana Workforce Resource Guide and a corresponding mentoring program were launched as part of a collaborative community effort. This fall, Sasol and the Community Foundation of Southwest Louisiana unveiled the next step: a pilot scholarship fund for job training. The SWLA Economic Development Alliance leads the Resource Guide Steering Committee, which will continue to collaborate with the Foundation to extend the program to support other key industries in the region.

Sasol has demonstrated its strong commitment to the U.S. market, to this project, and to the people of Louisiana. Their investment is also a testament to our strong economic climate, and shows the opportunities for companies from around the world to operate, grow, and succeed in the United States.

For more information on how SelectUSA can assist investors or economic development organizations, please visit www.selectusa.gov and follow @SelectUSA on Twitter! Make sure to mark your calendar for the SelectUSA Investment Summit on March 23-24, 2015 and sign up on our website for updates.

This new facility is a great example of how foreign direct investment (FDI) creates U.S. jobs, builds skills, and links markets. Companies from France employed nearly 525,000 U.S. workers in 2011. The total stock of FDI from France in the United States was $239 billion in 2013 – the fifth highest of any country.

Bel Brands USA decided to invest in the United States because it is now the top market for Mini Babybel cheese. In fact, sales volumes of Mini Babybel increased by 24 percent in 2013 – that’s roughly 10,000 tons of cheese last year.

They researched several locations across the country, and their decision to set up shop in Brookings was driven by three key factors:

Access to raw materials – More specifically, access to competitively priced milk. They will be processing a whopping 500,000 pounds of milk per day, purchased through two dairy co-ops in the region.

Business-friendly environment – The state and local governments worked closely with the company. For example, the South Dakota Department of Labor has been helping with recruitment efforts to ensure Bel Brands USA finds the talent they need. They had great turnout at a “walk-in” interview event in August, and they’re still moving full steam ahead on hiring.

Collaboration opportunities – The company was impressed by what South Dakota State University has to offer. Graduates of the Dairy Science program will help build a strong and lasting workforce. Bel Brands USA partnered with the biochemistry program in creating a lab in the new facility, and they are exploring other ways to cooperate.

What does this case study mean for other companies investing in the United States? Businesses all have particular factors that are critical to their competitiveness, varying by industry, business model, and strategy. Given the size and incredible diversity of the U.S. market – most companies can find exactly what they need in this country to be successful. With creativity and communication, local communities across the United States can be partners in this success.

How can SelectUSA assist?SelectUSA, the U.S. government-wide program to facilitate investment housed within the International Trade Administration, stands ready to assist investors to understand the U.S. market, gather data, and connect with the right people. If there are questions or issues related to federal rules and regulations, SelectUSA serves as an ombudsman to help companies find clarity. SelectUSA also works with state and local economic development organizations to provide counseling and information, a platform for promotion, and investment advocacy.

The German American Chamber of Commerce does an annual survey of German-owned subsidiaries in the United States called the German American Business Outlook. This report indicated there was a five-year high in investor confidence, with 98 percent of German firms in the United States expecting to see business growth in 2014. This level of confidence is reflected by the 31 percent of respondents planning the launch of new product lines and 75 percent anticipating making new hires for the coming year.

Survey respondents expressed some concerns about the lack of a skilled workforce in the United States, but still remained positive about the overall outlook in 2014. This upbeat outlook may be due in part to the various efforts by both the United States and Germany to address workforce issues, including the German Skills Initiative.

This collaborative effort between the German Embassy and the U.S. Department of Commerce focuses on bringing the German dual-track vocational training to the United States, concentrating on areas where high-skilled manufacturing clusters are located. The program matches German and American businesses with educational institutions to help create workforce training programs that will help produce workers with the specific skill sets demanded by the businesses of today – and tomorrow.

The commitment to workforce development and working with the German business community is demonstrated at all levels of the U.S. Department of Commerce. In November 2013, Secretary Penny Pritzker traveled to Munich, Germany to meet with German CEOs interested in establishing facilities (or expanding existing operations) in the United States. During her trip, she visited with business leaders from BMW, Frauenhofer, and iwis Motorsystems to learn more about their best practices for training and apprenticeship programs.

These kinds of relationships and exchanges on best practices will only enhance the attractiveness of the United States to international companies. As future workforce and training initiatives and partnerships come online, we expect to see growing interest in the U.S. market – not just from German companies, but others around the world.

The paper takes a closer look at the impact of FDI on the U.S. economy. Included in the report is an analysis of the competitive advantages that make the United States an attractive destination for investors and trends in FDI by geography and industry sector.

Foreign direct investment is a prime source of capital, job creation, innovation, and cross-border trade. FDI has continued to flourish in the United States because firms worldwide recognize the United States as an innovative and stable market executed in the world’s largest economy. The United States offers an unmatched opportunity for success due to its renowned educational institutions, growing industry clusters, first-class research and development centers, protection for intellectual property rights, an entrepreneurial environment, access to global markets, a predictable regulatory climate, and increasingly competitive cost factors.

Key takeaways include:

The United States is both the largest recipient and source of FDI in the world. FDI has long been an integral part of our economy. In 2012, the total stock of direct investment in the United States was $2.7 trillion and FDI inflows totaled $160.1 billion.

FDI creates jobs: As of 2011, the most recent data available, majority-owned subsidiaries of multinational firms with U.S. operations employ more than 5.6 million workers and pay an average annual compensation of $77,600.

FDI contributes to U.S. innovation and helps drive exports: These firms also spent more than $45 billion in research and development here and accounted for 20.5 percent of U.S. goods exportedin 2011.

The five largest country sources of FDI in the United States are the United Kingdom, Japan, Germany, Canada, and France, according to the U.S. Bureau of Economic Analysis. The latest estimates of FDI stock by ultimate beneficial owner reveal that Together, these economies account for nearly 61.5 percent of total FDI stock. In addition, markets across Asia, Latin America, and Europe have substantially grown their FDI position in the United States in recent years.

The United States wins out in investment climate according to the June 2013 FDI Confidence Index, A.T. Kearney awarded the United States the top spot. The World Economic Forum’s (WEF) Global Competitiveness Index ranks the United States among the top ten economies based on strengths in innovation, education, and overall size of economy.

Vinai Thummalapally is the Executive Director of the SelectUSA Program. This post originally appeared on the Department of Commerce blog.

Ambassador Vinai Thummalapally is the Executive Director of the SelectUSA Program.

In 2011, President Obama launched SelectUSA, the first-ever U.S. government-wide initiative to attract foreign direct investment (FDI) in the United States, with the hopes that the Department of Commerce would help facilitate both foreign and domestic business relationships and make FDI a diplomatic and foreign policy priority.

We took an enormous step forward three months ago, when the Commerce Department hosted the first-ever SelectUSA Investment Summit in Washington, DC. The summit was such a success that it sold out, and more than 1,300 business and government leaders from nearly 60 countries and economic development organizations from 48 states, the District of Columbia and three territories gathered to learn about the advantages of doing business in the United States and to explore investment opportunities. Perhaps most importantly, the Summit helped match potential investors with economic development organizations to help revitalize American communities and create new job opportunities.

Thankfully, we can continue to build upon the success of the Summit, now that the budget deal has been approved. The agreement will allow up to $7 million to expand and enhance the program, and we at the Commerce Department are pleased to have this extra support to bring more companies to our shores.

In fact, the U.S. has welcomed investment to our shores for centuries. Our market has provided long-term stability and unmatched returns for investors. Today, the United States is the largest recipient of FDI in the world, and in 2012 alone, more than $160 billion dollars of FDI flowed here. Total foreign stock and assets are measured not in billions, but in the trillions of dollars. Clearly, FDI is an important contributor to our economy.

But don’t take my word for it – SelectUSA has already helped bring jobs to the U.S. and foster many business relationships, both foreign and domestic.

For example, the Southern Idaho Economic Development Organization (SIEDO) approached SelectUSA for assistance as they worked with Frulact, a Portugal-based producer of fruit-based ingredients for food. SelectUSA advised SIEDO on the issues that would be critical for the company to consider, while also connecting them directly with our team on the ground in Portugal. After utilizing our advice, SIEDO and Frulact announced plans in October for a state-of-the-art 200,000 square foot facility in Rupert, Idaho, that is expected to employ at least 100 people.

We’re hearing plenty more success stories like this, and the SelectUSA program has proven to be a great “bang for the buck.”

We’re excited to continue enhancing SelectUSA with more congressional funding, and the Department of Commerce is ready to do all it can to connect investors with communities…and to open all avenues to guarantee that American is Open for Business.

After all, as President Obama said in his keynote address at the summit a few months ago, “When you bet on America, that bet pays off.”

Secretary of Commerce Penny Pritzker reiterated her message that the United States is open for business.

Ambassador Vinai Thummalapally is the Director of SelectUSA.

It’s now been two weeks since the SelectUSA 2013 Investment Summit, and we’re still catching our breath. There was incredible turnout for this first-ever national event, which brought together investors, business leaders, and economic development organizations to attract investment in the United States.

More than 1,300 participants packed the conference hall, coming from 60 international markets and across the United States. Tickets sold out because people from all over the world believe in the stability, potential, and promise of the American market.

Thank you to all who came, all who expressed interest, and all of the partners and colleagues who made this event a reality.

You can relive some of what happened here in Washington, D.C., through our archived videos, but it’s important to remember that it’s the follow-up and the everyday hard work that will carry forward the SelectUSA mission. As President Obama said in his remarks at the event, the Summit was the starting point to strengthen and expand the program to attract more investment to the United States.

We hope that the Summit was also a starting point for the types of new connections, new opportunities and new ideas that keep our economy moving forward. More than 650 private, one-on-one meetings were set up through our online matchmaking system, and hundreds more took place on the tradeshow floor.

Through these discussions, federal, state, and local government officials received direct feedback from business leaders and investors on how to better meet their needs. Delegations from 48 states, three U.S. territories, and the District of Columbia showed investors the numerous advantages to doing business in the United States.

This is where we begin the next phase.

Those connections can lead to the business deals that bring more investment and more American jobs. Our team is following up on inquiries, comments, and possibilities. We know that the investors, along with the state and local economic development organizations, are doing the same. As you work on your follow-up, SelectUSA can serve as your convenient, single point of contact all year round.

The team at SelectUSA, as well as our colleagues across the United States and at U.S. embassies and consulates worldwide, look forward to taking our mission to the next level. We hope to be in touch soon!

Thanks again for your interest. If you have questions, comments or you’d like to explore how we can assist you, please let us know.

You don’t have to look far to find something in your life that is produced by an international company operating in the United States. It might be the dishwasher in your kitchen, the brake pads on your car, or the elevator in your apartment building.

You also won’t have to look far to find jobs supported by foreign direct investment (FDI) in the United States. There are more than five million of them throughout the country, covering every state in both rural and urban communities.

Those are five million reasons why FDI is an important ingredient in the recipe for continued economic growth in the United States.

President Obama has made it a priority to attract more FDI to the United States, helping support more jobs and economic growth. A key tool in his efforts is the upcoming SelectUSA Investment Summit.

The Summit will connect global investors with U.S. leaders who are ready to showcase local investment projects. Economic development organizations from 15 states have already confirmed attendance at the event, offering myriad investment opportunities around the country.

Secretary of Commerce Penny Pritzker also announced an impressive lineup of government and business leaders to share important lessons about the advantages of investing in the United States – advantages ranging from our educated workforce, our relatively low energy costs, and the long history of ingenuity, innovation, and entrepreneurship that is synonymous with the “Made in America” label.

The Summit will also include various informational breakout sessions, including the benefits of investing in the United States, opportunities for reshoring, business-related visa issues, and promoting and safeguarding innovation.

International and domestic businesses, global investors, economic development professionals, advisors and academics will all benefit from attending the Summit.